The C.B.O. Gives the Senate Twenty-Two Million Reasons to Reject the Health-Care Bill

The nonpartisan Congressional Budget Office projected that the bill drafted by Mitch McConnell and other Senate Republicans would cause the number of uninsured to rise dramatically.

Photograph by Andrew Harrer / Bloomberg via Getty

In the run-up to the Congressional Budget Office’s release of its study
of the Senate Republicans’ health-care reform bill, on Monday afternoon,
you could tell that the Trump Administration and its allies on Capitol
Hill were getting nervous.

On Sunday, Tom Price, the Secretary of Health and Human Services, took a
preëmptive shot at the messenger, claiming, without much basis, that the
C.B.O. does a “relatively poor job” of analyzing the number of people
who will be insured and uninsured under any given piece of legislation.
Also on Sunday, Kellyanne Conway claimed, on ABC News, that the
Senate bill wouldn’t cut Medicaid, the federal program that provides
health care to poor families, even though the legislation states in
black and white that it will roll back the expansion of the program that
took effect under the Affordable Care Act.

The Administration’s nervousness turned out to be justified. The
C.B.O.’s analysis said that, relative to the current law, the Senate
legislation would increase the number of Americans who are uninsured by
about twenty-two million people over ten years. This number was very
close to the estimate of twenty-three million more uninsured that the
same office attached, last month, to the House Republicans’ reform
bill—the widely unloved American Health Care Act, which even President
Trump subsequently described as “mean.”

The C.B.O., which cherishes its independence and nonpartisan status,
doesn’t use words like “mean” or “kind.” It simply lays out its
projections, which, in this case, showed that “the increase in the
number of uninsured people relative to the number projected under
current law would reach 19 million in 2020 and 22 million in 2026. . . . By
2026, among people under age 65, enrollment in Medicaid would fall by
about 16 percent and an estimated 49 million people would be uninsured,”
compared to twenty-six million today.

The American population as a whole is also projected to expand during
the next decade, so the raw numbers perhaps don’t tell the full story.
But the C.B.O. analysis also projects a sharp rise in the uninsured
rate—the proportion of people under the age of sixty-five who don't
have health coverage. After the gains made since the introduction of the
Affordable Care Act, that rate in 2017 is down to about ten per cent. If
the Senate bill were enacted, the C.B.O. said, this rate would jump to
eighteen per cent by 2026, which is about where it was when Barack Obama
came to office.

Two factors account for most of the drop in coverage that the C.B.O.
projects. In the next two or three years, the biggest impact would come
from the abolition of the individual mandate to purchase insurance.
Since young and healthy people would no longer face a financial penalty
for forgoing coverage, many more of them would probably decide to skip
it.

As time went on, the cuts to Medicaid that the legislation contains
would start to have a dramatic effect. Over ten years, these
cuts would total about seven hundred and seventy billion dollars, the
C.B.O. analysis said. By 2021, some ten million fewer people would be
enrolled in Medicaid and its sibling, the Children’s Health Insurance
Program. By 2025, this number would rise to fifteen million. Indeed, the
fall in Medicaid enrollment would account for about two-thirds of the
over-all drop in coverage that the C.B.O. projects.

Whatever Trump and the Republicans might say, these figures make it very
clear that the working poor would be huge losers under the bill. One of
the progressive innovations of the A.C.A.’s expansion of Medicaid was
that it allowed working families who subsisted just above the poverty
line to get access to health care. According to the Kaiser Family
Foundation, about sixty per cent of the people who enrolled in the
program were employed. Under the Senate bill (and the House bill), many
of these workers, some of whom could be earning as little as fifteen
thousand dollars a year, would no longer be eligible for Medicaid in a
few years, and they would have to take their chances in the open market.

For them and anybody else who buys individual insurance, the outlook
would be grim. The C.B.O. analysis said that premiums in the private
market would rise by about twenty per cent next year, on average,
because of the elimination of the individual mandate. After that, price
premiums would start to fall relative to the current law, but so would
the quality of insurance plans. Plans would offer fewer health services,
and deductibles would rise even further.

All this would happen by design. Under current law, the benchmark
“silver” insurance plan covers about seventy per cent of over-all
health-care costs and has a deductible of about thirty-six hundred
dollars. Under the Senate plan, beginning in 2020, the benchmark plan
would cover about fifty-eight per cent of over-all costs, and it would
have a deductible of about six thousand dollars. For many people, that
is a small fortune. “As a result,” the C.B.O. report notes dryly, “despite
being eligible for premium tax credits, few low-income people would
purchase any plan.”

The bad news for purchasers in the individual market doesn’t end there,
either. Under the Senate bill, individual states could seek waivers that
allow them to duck other provisions of the A.C.A. that were introduced
to prevent health costs from bankrupting people with costly diseases,
such as diabetes or cancer. As a result of these waivers, the report
says, “some enrollees could see large increases in out-of-pocket
spending because annual or lifetime limits would be allowed.”

Contrary to expectations in some quarters, the Senate legislation didn't
even properly fix one obvious political problem of the House bill: the
huge increases in premiums that some elderly people could face. Although
the House’s tax credits would be replaced with direct subsidies, a
sixty-four-year-old who earns $26,500 a year would see the annual
premiums on his silver-level plan rise from $1,700 to $6,500. If he or
she earned $56,800 a year, the premiums would jump from $6,800 to
$20,500.

And who would be the winners? The very rich, of course. The bill would
eliminate the investment tax and income surtax that the A.C.A. imposed
on households earning more than a quarter of a million dollars a year.
While many poor and middle-income Americans would be adversely affected,
these lucky few would get a hefty handout.

For some reason, the White House didn’t mention these winners in its
response to the report. Instead, it issued a statement that tried to
rubbish the C.B.O.’s insurance-coverage projections. But the C.B.O.’s
estimates are the best we have, and for decades both parties have relied
on them in assessing prospective legislation. The ineluctable truth is
that Senate bill, like the House bill it largely mimics, would have
immensely damaging consequences. In pointing this out calmly and
clearly, the C.B.O. has performed an invaluable public service.

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